Thank you.
Good morning and thank you for the opportunity to appear before this committee. Thank you also for accommodating my appearance via teleconference.
I am a professor of law at the University of Calgary, where I teach, amongst other subjects, energy law. I also comment regularly on developments in energy law and policy on our blog, which is the blog of the faculty of law. I appear this morning in my personal capacity, and I also made a personal submission to the energy modernization panel.
My submission focuses principally on part 2 of Bill C-69, which, as you know, is concerned with the abolition of the National Energy Board and the creation of the new Canadian energy regulator. My written brief makes six main points and I think I have time for three of those this morning.
The first point the bill needs to address, in my view, is the close connection between energy policy, greenhouse gas emissions, and Canada’s climate change commitments. I think it is self-evident that there is a close connection between energy policy and climate policy, simply because the extraction, processing, production, transportation, and consumption of carbon-based fuels results in emissions of greenhouse gases, including carbon dioxide and methane.
Part 1 of Bill C-69, the impact assessment act, addresses this connection in two linked provisions. Proposed section 22 deals with the content of an impact assessment, and proposed section 63 deals with the final project decision to be made by the minister or Governor in Council.
There is no similar provision in part 2 of Bill C-69, notwithstanding the interconnection between climate and energy issues. I think this omission is especially significant when we consider that the CER will continue to perform the NEB's energy information function under proposed sections 80 to 86 of part 2 of Bill C-69. We can anticipate that the CER will continue, as part of this function, to prepare energy supply-demand forecasts for Canada. It's crucial that these forecasts be informed, and indeed constrained, by Canada's climate change commitments, as well as relevant provincial commitments.
Accordingly, I recommend that the committee consider proposing a series of amendments to part 2 to recognize the connection between energy policy and climate policy. I have three concrete proposals.
First, part 2 of the bill might include appropriate references to climate and energy policy in the purposes section, proposed section 6, and in the mandate provision of the bill, proposed section 11.
Second, I think that part 2 of the bill might borrow from the provisions of part 1 of Bill C-69, which I have already mentioned, and list climate change obligations as a relevant consideration when considering new projects.
Third, I propose a substantive provision that might be inserted immediately after the current proposed section 55. This might read as follows: “When making a decision, an order, or a recommendation under this act, or in discharging its mandate under sections 80 to 84, the commission must consider the Government of Canada's ability to meet its environmental obligations and its commitments in respect of climate change.”
I am now going to change direction a little and address two issues that relate to the transparency of the NEB's and the CER's processes, and the resulting judicial supervision of these processes. To do that, I need to make two background comments. The first is that we find ourselves here today discussing part 2 of this bill, because the elected government concluded that Canadians had lost faith in the review system for energy projects. Accordingly, we should be checking to ensure that the procedures that are being proposed will help restore that faith.
Second, the drafting of part 2 of Bill C-69 exhibits, notwithstanding its huge length, a certain economy in approach. What l mean by that is that notwithstanding the new name and the abolition of the NEB, much of this legislation is simply cut and pasted from the existing National Energy Board Act. One of the implications of this is that there are missed opportunities to improve the current approach.
I'll now make have two substantive comments following from those propositions.
The first is that the bill, as drafted, fails to clarify what is referred to as the exceptions process in the current act. This process allows the NEB to exempt projects from the requirements of the act, including the requirements for a public hearing and the need to obtain a certificate of public convenience and necessity. While this seems fairly innocuous since it's confined to pipelines not exceeding 40 kilometres, it was also the process that was used in relation to the controversial Line 9 project, which involved the reversal of over 600 kilometres of the Enbridge line between North Westover, near Hamilton, and Montreal, and a related expansion of throughput to allow oil sands product to reach further east. The exemption could be triggered because the project was largely using existing pipe and right-of-way.
The difficulty with this current provision, which is section 58, is that it's completely opaque from the outside. It fails to communicate to the public, including municipalities and others, how this discretion will be exercised and what terms and conditions might be included as part of granting the exemption. Bill C-69 does nothing to clarify this in what is now proposed section 214 of the bill, which is a copy of the current section 58.
Accordingly, I recommend that the committee consider how the bill could be amended to provide more transparent direction to the CER in exercising this important discretionary power. One possible avenue to explore will be to require the CER to address its mind to all of the factors listed in proposed section 262, which is the list of relevant considerations for pipeline projects requiring a certificate.
My final point relates to another missed opportunity, this time in the context of judicial supervision of the process. Under the current rules, decisions of both the NEB and the Governor in Council, where appropriate, can be appealed to the Federal Court of Appeal. The first step in this process is for an aggrieved party to file an application for leave to appeal with the Federal Court of Appeal. It's only if the court grants leave that a panel of the court will consider the merits of the appeal. By tradition, and I think it's no more than that, the Federal Court of Appeal does not provide reasons when it grants—or more commonly, denies—an application for leave. As a result, unsuccessful applicants feel aggrieved when they are denied further access to the court without knowing the reasons. The city of Burnaby has recently experienced this in the context of the Trans Mountain expansion project.
Once again, the current provisions are reproduced verbatim in part 2 of Bill C-69, proposed sections 72 and 188. In my view, this undermines the faith of the public and the integrity of the project review scheme in a most unfortunate and unnecessary way. Accordingly, I recommend that the committee should propose amendments to Bill C-69 to require the Federal Court of Appeal to provide reasons for its decision on leave applications under this act.
While I acknowledge that it is perhaps unusual to give this level of direction to a court, I think that if the court can't see the problem itself then it needs some direction. Other superior courts in Canada provide reasons for exercising their authority under similar leave applications. For example, the Court of Appeal of Alberta routinely provides reasons on leave applications involving the Alberta Energy Regulator.
I make these last two points—the exception point and this point about reasons—in light of the concerns that are alleged to be driving this modernization process. I think that each of these proposals will add transparency and accountability and, hence, improve the public's trust in the integrity of the process.
That concludes my remarks.